| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Departure of Chief Executive Officer and Director
On March 3, 2022, TuSimple Holdings Inc. (the “Company”) announced the resignation of Cheng Lu as President, Chief Executive Officer and as a member of the Company’s Board of Directors (the “Board”), each effective as of March 3, 2022 (the “Termination Date”).
In connection with Mr. Lu’s resignation as President and Chief Executive Officer, the Company has entered into a letter agreement with Mr. Lu (the “Transition and Separation Agreement”). To support a smooth transition, the Transition and Separation Agreement provides that Mr. Lu will provide certain ongoing advisory services to the Chief Executive Officer for one year following the Termination Date (the “Transition Period”). As consideration for such ongoing services, the Company will pay Mr. Lu an annualized salary of $450,000 during the Transition Period.
In addition, the Transition and Separation Agreement provides for a mutual general release of claims and certain other standard provisions to be effective as of the Termination Date. As consideration for entering into the Transition and Separation Agreement, the Company will pay Mr. Lu a lump sum equal to $50,000 on the Termination Date, representing Mr. Lu’s salary earned through the Termination Date. Additionally, effective as of the date immediately prior to the Termination Date, all (i) options to purchase Class A common stock of the Company granted during Mr. Lu’s employment shall become vested and exercisable twelve months after the Termination Date and (ii) unvested restricted stock units (“RSUs”) granted during Mr. Lu’s employment shall become vested, regardless of whether the applicable time-based vesting requirements applicable to such options and such RSUs have been satisfied as of the Termination Date. Pursuant to the Transition and Separation Agreement, notwithstanding anything to the contrary in the applicable award agreements, (i) each aforementioned option shall remain outstanding and exercisable until the earliest of: (a) the date on which any of the Company’s outstanding options are terminated in connection with the occurrence of certain corporate transactions, as described in the applicable stock plan; (b) the original expiration date applicable to such option; and (c) the second anniversary of the last date of the Transition Period, and (ii) the settlement of the RSUs that become vested in accordance with the above shall occur no later than March 15, 2023.
The above description is a summary of the Transition and Separation Agreement and does not purport to be complete and is subject to, and is qualified in its entirety by reference to the full text of the Transition and Separation Agreement, which is filed as Exhibit 10.1 with this Current Report on Form 8-K and is incorporated herein by reference.
Resignation of Executive Chairman
In addition, the Company announced the resignation of Mo Chen as Executive Chairman of the Board, effective as of the Termination Date. Mr. Chen will remain a director on the Board.
Appointment of Chairperson and President and Chief Executive Officer
The Board has appointed Xiaodi Hou, the Company’s co-founder and Chief Technology Officer and a member of the Board, as Chairperson of the Board, effective as of the Termination Date.
In addition, the Board has appointed Dr. Hou as President and Chief Executive Officer of the Company, effective as of the Termination Date.
